<html><head><meta http-equiv="content-type" content="text/html; charset=utf-8"></head><body dir="auto"><div dir="ltr"><span></span></div><div dir="ltr">Patrick:<div><br></div><div>Your argument is moot..</div><div><br></div><div>A very simple analogy when email was introduced and now used by the entire world - are you taxing email platforms..So why hold the same argument for these OTT applications - why pay for services that the government never invented in the first place..</div><div><br></div><div>The basic premise is that without technology disruption our society will never advance and governments are the worst culprits of such hindrance to society’s advancement in this world..</div><div><br></div><div>Governments love to control and that fact alone is a motivator to circumvent such an ecosystem..The premise of human advancement is adapting to new revolutions and disruptions..</div><div><br></div><div>Governments should not hinder progress and when it comes to collecting revenues from so called innovators and disruptors then bring such companies to Kenya to set up base and provide them with incentives and ask them to employ Kenyan citizens etc - drive such an encouragement with finding suitable models for advancement of societies..</div><div><br></div><div>Taxation is just a cheap way of protectionism - it does not work..It impedes human progress..<br><br><div id="AppleMailSignature" dir="ltr">Cheers!<div>Bhaves</div></div><div dir="ltr"><br>On 6 Nov 2018, at 5:18 PM, Patrick A. M. Maina via kictanet <<a href="mailto:kictanet@lists.kictanet.or.ke">kictanet@lists.kictanet.or.ke</a>> wrote:<br><br></div><blockquote type="cite"><div dir="ltr"><div class="ydp1485132dyahoo-style-wrap" style="font-family: times new roman, new york, times, serif; font-size: 16px;"><div></div>
<div>OK I'm back (briefly). Thanks for your points Mr. Okobi,</div><div><br></div><div>Actually the only difference between "taxes" and "fines" is the definition. Taxes can be based on anything - not just earnings. Example: What is VAT? A tax on consumption! Why should you pay extra tax on consumption after you have already been taxed on income? Does that make sense? Is that not fining or penalizing people for enjoying their *already taxed* money? </div><div><br></div><div>Another example: why tax food or books? These are essential must-have items. I should not be taxed to eat or educate my kids. Isn't that not a form of "existence tax"? What about tax on sanitary pads? Is that not discriminating against girls (they end up paying more taxes than boys because its a gender-specific essential purchase). Why tax people for keeping clean babies (diaper tax)? Why tax people for going to work (fuel VAT)? etc etc. I'd love to hear your views about the rationality of these taxes.</div><div><br></div><div>Oh, btw, even the fines one pays in court are a form of compliance/obedience tax. Those who follow the rules pay less taxes (thus encouraging compliance). Anyway, lets not get stuck on definitions but I'd urge you to read some good books on taxation & economics to get a grip of this.</div><div><br></div><div>Okay, who has said anything about taxing "online services" or "all online services"? That is a strawman argument that diverts attention from the real issue. I am only talking about online apps with high potential for *abuse at scale*, which imposes a heavy cost burden on Governments and/or society (e.g. Facebook, Whatsapp, Telegram etc). These apps (and their problematic architectures) are well known and Governments worldwide are scrambling to find solutions to the problems that they have enabled/amplified by design. </div><div><br></div><div>Why should Kenyan taxpayers *subsidize* the fixing of costly problems caused/facilitated/amplified by these foreign billion dollar apps who don't contribute their share of taxes locally or accept their share of responsibility? This is a form of reverse taxation where our Government is effectively "paying" taxes to Facebook and Whatsapp!</div><div><br></div><div>Tobacco analogy might help elucidate the issue: When tax funds are spent on lung cancer treatment for cigarette smokers, isn't that a subsidy paid by taxpayers - including <span><span style="color: rgb(0, 0, 0); font-family: times new roman, new york, times, serif; font-size: 16px;">non-smokers, </span></span>to Tobacco companies? Looks like a no-brainer nowadays but it took a while (and similar debates) for Tobacco companies to accept because it takes decades for lung cancer to form. Many even paid for fake scientific studies to disprove claims that Tobacco smoking is harmful. Very similar to what some notorious data aggregating multinationals have been accused of doing. </div><div><br></div><div>Glad that you accept that there is indeed a cost burden for Government (and society) from fake news that is amplified by these social media platforms like Facebook and whatsapp. At least we have a common understanding that there is a real problem.</div><div><br></div><div>Is there data? Yes, the data does exist which directly associates these apps (e.g. Whatsapp & facebook) to crime, addiction, subversion, mob violence and deaths. See my earlier post on this with several links.<br></div><div><br></div><div>Why are we so attached to these apps? How many jobs do they create here? How do we benefit from them such that they are not irreplaceable by local clones? Perhaps that is the question that we should be asking.</div><div><br></div><div>The 21st Century tax innovations that I am proposing may be difficult to grasp because they does not yet exist and require a non-traditional view of how businesses operate (especially those based on the Silicon Valley VC and Data Mining model). But that is where the world is heading. </div><div><br></div><div>Citizens data is a national product. Should off-shore data aggregation / mining multinationals get it for free? Should they be allowed to manipulate/brainwash us or our children - in order to monetize the ensuing engagement - and then let us bear whatever consequences that ensue downstream? Should they be allowed to facilitate the spread of disinformation by design - even with the risk of causing harm or deaths to innocent victims? Should they impose new/heavier cost burdens on governments. Should they be allowed to facilitate and protect criminals by design?</div><div><br></div><div> These are 21st century issues that didn't even exist 10 years ago. They require 21st century thinking and solutions.</div><div><br></div><div>Cheers & have a great evening!</div><div>Patrick.</div><div><br></div>
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On Tuesday, November 6, 2018, 3:47:48 PM GMT+3, Ebele Okobi <<a href="mailto:ebeleokobi@fb.com">ebeleokobi@fb.com</a>> wrote:
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If your model is not revenue based, then what you are talking about is not a tax, it’s a fine.
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<div> I’m curious as to what data you are using to determine that online services are “net negative”? Is this your assessment for Kenya specifically, or is your contention that globally, all online services provide net negative value to the world? There are
multiple studies on the economic and social benefit of online services, so I am quite interested in learning of those which substantiate the net negative claim.
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<div>And would this tax regime be a global tax-in other words, should it also apply to Kenyan companies operating globally? For example, for those on this list with Kenyan companies offering online services, should this tax regime apply to them in Kenya? Should,
for ex., Uganda apply a similar regime for Kenyan companies offering online services there?</div>
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<div>In terms of the metrics you propose-Facebook is a public company, as are many companies offering online services. What is the relevance of funds raised in this context? In addition-valuation for a public company is a completely different metric than funds
raised-curious as to how this would be made predictable, given that a good environment for economic growth depends to a great extent on a rationalized policy and regulatory environment?</div>
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<div>As for the security issues-i have acknowledged previously the challenges and there, and there is excellent opportunity for collective thinking on how to deal with platforms that are a mirror of the divisions and risks in societies (which we are doing!)
but nothing recommended below addresses or mitigates any of those risks. I am mindful that the most violent periods politically in Kenya predated Facebook and WhatsApp, so the notion that these platforms cause violence, or that taxing them would remove security
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On Nov 6, 2018, at 12:12 PM, Patrick A. M. Maina <<a shape="rect" href="mailto:pmaina2000@yahoo.com" rel="nofollow" target="_blank">pmaina2000@yahoo.com</a>> wrote:<br clear="none">
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<div>Whatsapp is not monetised and does not derive any revenue from anywhere yet (this will change next year). This should have no bearing at all on whether Whatsapp should be taxed or not. It is a billion dollar multinational company operating on a non-traditional
business model. This means that it is our tax regulations which need to be *modernized* to rope in 21st century global business models that add a local cost burden on the government (e.g. increasing costs of security, turning kids into narcissistic screen
zombies - with resulting impact on learning and metal health etc) yet do not contribute to the local kitty - which is unfair considering that they are *billion dollar* companies. </div>
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<div>To put it differently, any shilling that Government spends to mitigate the risks of fake news in whatsapp or Facebook (e.g. buying ads to push correct position) is a subsidy paid to Facebook and Whatsapp. This is money that could have gone to health sector
to buy medicine, sanitation for clean water or agriculture for food security. Instead it goes to fix a problem created by an entity that has net negative value to the economy. Not all innovation is good or beneficial!</div>
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<div>How to tax Silicon valley business models: Use the same metrics investors use:</div>
<div>1. Estimated number of users / downloads</div>
<div>2. Risk / benefit factor (e.g. security risks or impact on jobs/wages)</div>
<div>3. Valuation (funds raised)</div>
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<div>Silicon valley companies are designed to make losses for decades even as they move massive amounts of money (literally avoiding taxes by exploiting obsolete legislation). The real business they are in is the fundraising business but that is under the tax
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<div>Signing off. Will check back later for updates.</div>
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<div>On Tuesday, November 6, 2018, 2:45:18 PM GMT+3, Ebele Okobi via kictanet <<a shape="rect" href="mailto:kictanet@lists.kictanet.or.ke" rel="nofollow" target="_blank">kictanet@lists.kictanet.or.ke</a>> wrote:
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<div>This is a fascinating and very timely conversation. As I’m sure all can imagine, I have many thoughts. 😁
<div>I do have a question, first-how much revenue does WhatsApp derive from Kenya?<br clear="none">
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On Nov 6, 2018, at 7:45 AM, evelyne wanjiku via kictanet <<a shape="rect" href="mailto:kictanet@lists.kictanet.or.ke" rel="nofollow" target="_blank">kictanet@lists.kictanet.or.ke</a>> wrote:<br clear="none">
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<div>The government needs to consider taxing the platforms. This is because they make money from us trade in our data and the revenue genereted benefits their countries and not ours given that they do not pay taxes here. This has been considered in Europe.
In africa however, no country can apply this taxes on its own due to our 'economically colonised' position our countries find ourselves in. This means that the easiest option for our government becomes the easy route which is taxing the end user. This is counterproductive
especially for those who use social media for productive activities. Therefore only a united african front would be succesful in getting these giants to pay up and keep our governments from considering taxing citizens. It is also important to consider that
calls made on whatsapp, skype,viber cost less. This means that there is revenue reduction for the companies providing voice services. Considering that these companies are locally based and pay taxes to our government, why should their revenue be reduced by
services that do not pay taxes to us? I suppose this is the logic used by countries like the UAE that block the use of whatsapp to make calls whithin their borders.
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<div>As for the ability of whatsapp to cause chaos, this is true and has been proven and whatsapp itself has acknowlegded this fact in countries like India and Pakistan. These are countries where fake news and inflammatory messages delivered mainly through
whatsapp have led to chaos that have led to deaths of many people. Whatsapp has responded by putting in measures to ensure that such spread of hate news can be controlled from their end. Whatsapp also remains open open to suggestions as to how this can be
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<div>The question therefore should be, should we leave Whatsapp to be in charge of what is transfered on their platform and the consequences that follow? Should government have a role in monitoring how whatsapp is being used for harmful activities. Overall
what is the role of government and the various platforms in ensuring this platform and others are used responsibly?</div>
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<div>On Tuesday, November 6, 2018, 3:44:22 AM GMT+3, Francis Monyango via kictanet <<a shape="rect" href="mailto:kictanet@lists.kictanet.or.ke" rel="nofollow" target="_blank">kictanet@lists.kictanet.or.ke</a>> wrote:
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<div>Morning Mr Patrick Maina,
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<div>You mention how messaging apps facilitate fake news, crime and other things. You also lay peace,development on a scale versus human rights such as free speech and privacy. </div>
<div>Sir, it is good to be objective and factual. Last year Kenya had 10 months of hot politics. Research shows that the Kenyan authorities did not attempt to control, disrupt or shutdown the internet. Hence this tired line of the country going into flames
because of the internet (messaging apps) doesn't hold any weight. The number of Kenyan users of these messaging apps and other factors such as social class of users, bots affect the impact of the internet in democratic transitions. The broadcast media shut
down in January should tell which communication medium has more impact on the Kenyan society. 😉</div>
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<div>I believe your intention was to state why companies that offer over the top services should pay taxes here. That is a different argument all together with a different set of facts unless you are advocating for a blanket over the top tax to be paid by users
to avoid 'spread of gossip and lies' just like in Uganda.</div>
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<div dir="ltr">On Fri, 2 Nov 2018, 13:26 Patrick A. M. Maina via kictanet, <<a shape="rect" href="mailto:kictanet@lists.kictanet.or.ke" rel="nofollow" target="_blank">kictanet@lists.kictanet.or.ke</a>> wrote:<br clear="none">
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These messaging apps facilitate fake news, crime, foreign meddling (to subvert democracy), brainwashing and hate speech on a massive scale. We know this for a fact. </div>
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So as citizens and stakeholders in our country, we need to ask: what do we value more, is it things that improve peace, stability, economic development and democracy, OR, is it some utopian, unbounded notion of free speech and privacy that is disconnected from
our contextual reality (e.g. protects criminals, malicious defamers and violence mongers in equal proportion as law abiding citizens)?</div>
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The companies running these uncontrolled messaging platforms will not be impacted if our country goes up in flames. They cost governments tons of money in maintaining internal security (especially during democratic transitions - sometimes to existential levels)
yet they don't pay any taxes... and mark you, they are *billion dollar* companies! This also means that funds that ought to have bought, say, medicine to save lives gets diverted to fix an *imported problem* with no path to holding the parent company accountable
for damage caused.</div>
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Gok needs to modernize our tax laws, which currently are based on the traditional "for profit" enterprise model and thus out of touch with Silicon Valley's "make losses by design" model. The basic assumption that entrepreneurship is a profit oriented endeavour
does not hold for Silicon Valley VC subsidized companies. They are designed to operate as loss makers for decades (but still move *massive* amounts of financial resources at massive scale). This has the technical effect of *tax avoidance* because massive profits
*are* still being made by the offshore VCs - which denies governments billions in taxes (despite imposing local burdens as illustrated above). </div>
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A smart government would create modernized laws to tax VC funded Silicon Valley companies e.g. on the basis of *funding rounds* and *valuations* because this is their *real* business i.e. its how the investors intend to make money from day one - and the primary
reason they push for perpetual losses!</div>
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There should also be a turnover tax and VAT on online revenue earned in Kenya by foreign billion dollar internet companies (e.g. advertisement revenue and appstore revenue), to level the tax playing field for local businesses. Similar to what other countries
like the UK are working on: </div>
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<div><font face="Helvetica Neue, Helvetica, Arial, sans-serif"><span style="font-size:16px;"><a shape="rect" href="https://urldefense.proofpoint.com/v2/url?u=https-3A__www.wired.co.uk_article_facebook-2Duk-2Dtax-2Dbill&d=DwMFaQ&c=5VD0RTtNlTh3ycd41b3MUw&r=ArvepG4_wcNu_X9xi3nb_Xa9WsGLVfmK6mwPdVONOTE&m=t74BOKebo761FiLlF3RuH-SUnKGeYceUv24Gp4-Sj5E&s=JpThF3QS5XBibcjJ1Aylg-RSK6s4MaGJtnzz9ILzC9k&e=" rel="nofollow" target="_blank">https://www.wired.co.uk/article/facebook-uk-tax-bill</a></span></font><br clear="none">
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CA will obviously have a hard time monitoring and enforcing though, under the current traditional framework due to technical barriers (e.g. encryption) and also due to jurisdictional challenges. </div>
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So the other thing that CA really needs to do once the rules are set is to consider blocking non-compliant foreign apps completely at ISP level (especially now that political temperatures are cool and people and thinking clearly). Lets have local startups filling
any gaps with copycat apps China-style. </div>
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To be clear, I support free speech and privacy. But I also support peace, stability, safe neighbourhoods, democracy, sovereignty and economic predictability!</div>
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A delicate balance is needed to maximise the rights of law abiding citizens while minimising the ability of those with evil intent to exploit basic rights in order to harm the innocent.</div>
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Good day.</div>
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Patrick.</div>
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<div>On Thursday, November 1, 2018, 11:00:44 PM GMT+3, Grace Githaiga via kictanet <<a shape="rect" href="mailto:kictanet@lists.kictanet.or.ke" rel="nofollow" target="_blank">kictanet@lists.kictanet.or.ke</a>> wrote:
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<p style="color:rgb(93,93,93);font-family:georgia, century w01;font-size:17px;margin-bottom:15.6px;line-height:25px;">
The Communications Authority of Kenya (CA) is in search of a consultant to study and determine how the so-called over-the-top services (OTTS) operated by groups such as Facebook, which runs WhatsApp, and Skype owner Microsoft, could be regulated.</p>
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT
enabled growth and development.<br clear="none">
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KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or
qualifications.<br clear="none">
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</div></div></blockquote><blockquote type="cite"><div dir="ltr"><span>_______________________________________________</span><br><span>kictanet mailing list</span><br><span><a href="mailto:kictanet@lists.kictanet.or.ke">kictanet@lists.kictanet.or.ke</a></span><br><span><a href="https://lists.kictanet.or.ke/mailman/listinfo/kictanet">https://lists.kictanet.or.ke/mailman/listinfo/kictanet</a></span><br><span>Twitter: <a href="http://twitter.com/kictanet">http://twitter.com/kictanet</a></span><br><span>Facebook: <a href="https://www.facebook.com/KICTANet/">https://www.facebook.com/KICTANet/</a></span><br><span>Domain Registration sponsored by <a href="http://www.eacdirectory.co.ke">www.eacdirectory.co.ke</a></span><br><span></span><br><span>Unsubscribe or change your options at <a href="https://lists.kictanet.or.ke/mailman/options/kictanet/bhaves.shah%40jabjabgroup.com">https://lists.kictanet.or.ke/mailman/options/kictanet/bhaves.shah%40jabjabgroup.com</a></span><br><span></span><br><span>The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for people and institutions interested and involved in ICT policy and regulation. The network aims to act as a catalyst for reform in the ICT sector in support of the national aim of ICT enabled growth and development.</span><br><span></span><br><span>KICTANetiquette : Adhere to the same standards of acceptable behaviors online that you follow in real life: respect people's times and bandwidth, share knowledge, don't flame or abuse or personalize, respect privacy, do not spam, do not market your wares or qualifications.</span><br></div></blockquote></div></div></body></html>